Who Owns a Tip? Trump May Shift It to Restaurant Owners

Working for tips isn’t easy, but at the end of the day, waitstaff and other tipped workers can count on those gratuities ending up in their pockets.

That may change under the Trump administration. The Department of Labor has indicated it intends to rescind an Obama-era rule restricting restaurant owners from pooling tips, or taking tips from waitstaff and redistributing the money to workers throughout the restaurant, according to the National Law Review.


“This is an issue about income inequality. It’s a race to the bottom. Maybe workers were making $15 an hour after tips, now they could just make $7.25,” or the federal minimum wage, under the proposed rule, said Patricia Smith, senior counsel at the National Employment Law Project and former Obama administration solicitor of labor. “Given the history, that there are some employers that steal tips already, this is a way of doing what they have been doing, but it becomes legal.”

Restaurant owners might want to help other workers by pooling tips, but the answer isn’t to take money away from waiters and waitresses, said NELP’s Smith.

“My response is, why not pay them more? Why are you paying them off the back of the front-of-the-house workers?” Smith said.

“It’ll be an economic hit on the front-of-the-house staff,” said NELP’s Smith. “Whether they will leave the industry or not depends on their circumstances. They may well leave if there are better opportunities elsewhere.”

Read the full article on CBS News.

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